July 19, 2024
CEO Comments
Consolis delivered a second quarter with adjusted EBITDA of € 11.2 million (17.8) corresponding to an adjusted EBITDA margin of 4.8 percent (6.7). The market for especially new residential building continued to be suppressed during the second quarter, although the order intake was slightly stronger than last year at € 273 million (235) corresponding to a book-to-bill at 1.2. LTM cash conversion by end of Q2 2024 was 78 percent (72).
Challenging market conditions
The market conditions continued to be challenging during the second quarter and the demand for new residential building continued to be low. Order intake for the second quarter amounted to € 273 million (235) with a corresponding book-to-bill ratio of 1.2.
Net sales in Q2 amounted to € 234 million, down 12 percent compared to last year (265). Net sales during the second quarter is again the consequence of the low order intake experienced in recent quarters in our residential exposed segments where West- and East Nordics had significant sales drop compared to last year.
Adjusted EBITDA for the second quarter amounted to € 11.2 million, and the drop in profitability seen in Q1 compared to last year continued. As for net sales, this is a direct consequence of the lower order intake for the group in previous periods. The group continues to put large efforts in keeping costs under control adjusting for the lower volumes in the market, but current low levels are hard to off-set fully. LTM cash conversion in Q2 was 78 percent (72), improved by better working capital in the quarter, but also impacted by the low levels of adjusted EBITDA.
Significant actions for resilience
On May 4, the group announced that it had entered in to a comprehensive recapitalization transaction with its main stakeholders. As of June 11, additional holders of its 5.75 per cent Senior Secured Notes due 2026 have now acceded to the Restructuring Support Agreement, such that the Transaction has the support of SSN holders holding more than 93% of the principal amount outstanding. The Company maintains its expectation that the Transaction announced on May 4, 2024 will be completed by the third quarter of this year and expects it to be implemented consensually.
Taking the lead in low carbon concrete as a competitive advantage
Though the challenging market environment and head-wind in new residential building the group continues its efforts to push our low carbon product line Green Spine Line ®. By half year 2024, some 37% (30) of Consolis total produced volume was Green Spine Line® products. This equals some 580k tons (535) certified products with a direct saving of 21,000 tons (17,200) carbon dioxide emissions when compared to regular precast concrete.
Highlights of the second quarter 2024:
- Net sales amounted to € 234 million (265), corresponding to a decrease of 12 percent. Currency effects had a negative impact of 1 percent.
- Operating profit (EBIT) amounted to € -16.0 million (8.8).
- Adjusted EBITDA amounted to € 11.2 million (17.8), corresponding to a margin of 4.8 percent (6.7). Exchange rates had a negative impact of 3 percent.
- Order book increased 9 percent to € 588 million, compared to € 537 million at the beginning of the quarter. Order intake in the quarter totaled € 273 million, and the book-to-bill ratio corresponded to 1.2 (0.9).
- Free cash flow in the quarter amounted to € -11.9 million (-0.6). LTM cash conversion was 78 percent.
The quarterly earnings report will be available on www.consolis.com
